Kuwait's Agility signs new credit facility of $1.42bn to fund John Menzies buyout

Logistics company closed the deal to fully acquire the British airport services group on August 4

Kuwait-based Agility will merge its subsidiary, National Aviation Services, with John Menzies. Photo: Menzies Aviation
Beta V.1.0 - Powered by automated translation

Kuwait-based Agility, one of the largest logistics companies in the Mena region, has signed a new credit facility of €1.4 billion ($1.42bn) to fund the acquisition of UK-based John Menzies and other growth plans.

The company also expects to sign two replacement facilities in the coming week and add a further €400 million of facilities to replace an existing short-term loan, it said in a filing to the Boursa Kuwait on Sunday.

"These will be used to finance the company's growth plans, including the long-term financing of the John Menzies Plc acquisition," Agility said, without identifying the banks.

The latest deal is part of a funding round that raised Agility's credit lines with existing and new local, regional and international banks to $3.2bn, from $1.4bn, it said. The credit lines have maturities of three, five and six years.

On August 4, Agility finalised its £763m ($921.5m) acquisition of UK-based aviation company John Menzies in a deal that creates the world's biggest aviation services provider.

The boards of Agility and John Menzies reached an agreement on March 30 on Agility’s cash offer to acquire 100 per cent of the UK-based company's ordinary shares.

The deal values John Menzies at approximately £571m on a fully diluted basis and approximately £763m on an enterprise value basis, the companies said in a joint statement at the time.

Agility will merge its subsidiary, National Aviation Services, with John Menzies, creating the world’s largest aviation services company by number of countries and second largest by number of airports served, it said.

Menzies Aviation, the combined company, will provide air cargo services, fuel services and ground services at airports around the world.

The new company will have approximately 35,000 employees and operations at 254 airports in 58 countries, handling 600,000 aircraft turns, 2 million tonnes of air cargo and 2.5 million fuelling turns a year.

Menzies Aviation's customers will include the UAE's Emirates and flydubai, Air Canada, Air China, Air France-KLM and American Airlines.

“We will have the scale and resources to expand and grow as the industry recovers from the Covid-19 pandemic," NAS chief executive Hassan El Houry, who will become chairman of Menzies Aviation, said last week.

"Commercial aviation is a key engine of global economic growth, and our customers need partners they can count on as flight volumes return."

Global air cargo demand in the first half of 2022 was 2.2 per cent above pre-Covid levels in the first six months of 2019, but 4.3 per cent below 2021 levels, according to data from the International Air Transport Association.

"That’s a strong performance, particularly considering continuing supply chain constraints and the loss of capacity due to the war in Ukraine," Willie Walsh, Iata's director general, said last week.

"Current economic uncertainties have had little impact on demand for air cargo, but developments will need to be closely monitored in the second half."

Updated: August 07, 2022, 10:02 AM